Faster Net access faces speed bumps
Telus told to expand broadband coverage in rural areas
By Keith Gerein, Edmonton Journal
September 5, 2010
EDMONTON - Katherine Whiteside can't imagine her life without the Internet.
As chief administrative officer for the Village of Holden, she constantly depends on the ability to upload, download, e-mail and surf. At home, she's completed eight online courses, a feat that would have been nearly impossible without a fast connection to cyberspace.
Such access is a relatively recent addition for the village. Whereas a few years ago there was no reliable, affordable service available to Holden's homes and businesses, today there is a choice of high-speed options.
"About four years ago, I was willing to do just about anything to get high speed. There was really a need for it, because the world doesn't move at dial-up speed anymore," Whiteside said.
"These days, I think anybody in town can get high-speed and as far as the rural areas, I believe there is some pretty good coverage there as well."
Though Whiteside says she's satisfied, that isn't stopping governments and the private sector from pouring more money into what is becoming an increasingly complex and crowded marketplace for rural Internet service.
Telus, for example, was ordered last week by a federal agency to draw $100 million from a surplus account to begin extending its ADSL lines, or "wired" technology, to 150 small communities in B.C. and Alberta. At the same time, the Alberta government is embarking on its "Final Mile" initiative, a project that could eventually involve large expenditures to improve broadband coverage in low-populated areas.
While such projects may bring more competition to the 400 residents of Holden, questions remain about whether they are really a necessary investment since many such communities already have good high-speed choices.
Q: Where did the money come from?
A: Last week's order to Telus, made by the Canadian Radio-television and Telecommunications Commission, concerned millions of dollars that have been sitting in deferral accounts for years.
The money was built up between 2002 and 2006, when the CRTC pursued a strategy to promote competition in local phone markets. Hoping new firms would jump into the industry, the agency kept phone rates offered by the country's major companies artificially high by ordering them to charge premiums to customers.
Those premiums eventually accumulated in the deferral accounts to a total of $650 million, and became the subject of years of legal wrangling. In Telus's case, the CRTC ordered the company to return a portion of the funds to customers through rebates, while spending the rest on extending ADSL wires to communities without adequate broadband.
Q: What's the issue?
A: Though Telus says it's ready to get on with the work, several points of controversy have emerged.
In its order, the CRTC specified the communities to be hooked up by using a list of sites Telus recommended. The problem is that Telus submitted that list in 2008. In the two years since, while the company was waiting for a ruling, the rural broadband marketplace has become considerably more crowded.
"It's frustrating because technology has moved along incredibly fast," said Jim Johannsson, spokesman for Telus.
Internet in Alberta is now provided through a mix of ADSL wires, cable lines, satellite-based systems and wireless networks, which transmit information to computers through the use of communications towers. For example, Telus switched on a new wireless network late last year that the company says can reach 99 per cent of Alberta households, rural or urban.
As such, if the province's small communities already have high-speed choices, what's the benefit of spending millions to add more?
"It's unfortunate this (CRTC) process has taken as long as it has," said Mark Goldberg, an Ontario-based telecommunications consultant who authored a report last year looking at Internet coverage in Canada. "With all the best intentions, there have been all these unintended consequences, resulting in a level of spending that may not deliver greatest bang for the buck."
Q: Are there other concerns?
A: There are number of advantages and disadvantages to both "wired" and "wireless" technology.
For example, ADSL is generally cheaper, costing a typical household between $17 and $28 a month. Wireless typically costs between $35 and $65 a month, but in other ways it's considered the superior technology.
For one thing, it's mobile, allowing people to take their laptops with them rather than being chained to their desks. Telus's new network will also soon be capable of data-transfer speeds up to 42 megabits per second. ADSL's download speeds for most households are currently around six megabits per second, although this can go higher, Johannsson said.
This all adds up to a question of whether Telus is using the $100 million to install essentially second-rate technology.
Johannsson suggests the new ADSL lines will give consumers in those small communities one more option than they had before. He said many communities have had dialup, wireless and satellite options, but ADSL may prove to be better for some customers.
Q: What is the government doing?
A: In 2005, the province completed the SuperNet, which extended high-speed service to public facilities -- schools, hospitals, libraries and municipal buildings -- in 429 communities. Now, the government pushing ahead on the Final Mile Broadband Initiative, which is meant to address any rural Albertans who are still unserved or under-served in their homes and businesses.
A study commissioned last year by the Alberta Association of Municipal Districts and Counties suggested about 34 per cent of rural residents fit into those categories.
The government would like to all but erase that figure, and has set a goal of delivering broadband to 98 per cent of the population within two years. That sounds impressive, but Telus's statistics indicate its wireless network alone already reaches 99 per cent of Alberta households, which, if true, indicates the final mile project may be unnecessary.
Service Alberta Minister Heather Klimchuk acknowledged there is a great deal of confusion in the broadband marketplace right now, something the final-mile project hopes to clear up. She said the government is looking for advice from industry to find out where the gaps are in the grid and what can be done to fill them.
"Whatever we roll out, we want to make sure it's not duplicating work that's already been done," she said. "But I'm also never going to say to someone you can only have this or that. It's up to individuals to choose what they need."
If gaps are found, financial incentives might have to be provided to encourage Internet providers to expand their networks -- wired, wireless or satellite -- into remote areas. Telus, for example, admits it would be too costly to extend ADSL wires to places like Holden if it couldn't use the $100 million sitting in the deferral accounts.
Of course, such incentives raise the issue of whether public money should be used at all to help for-profit firms expand their coverage zones. Evidence indicates that in certain conditions, companies have been willing to expand into rural areas without taxpayer subsidies.
"Absent any government incentive, we have seen considerable investment from major phone companies, the major cable companies and an array of smaller companies that have gone into underserved territories," Goldberg said.
Q: What might be a better use of the money?
A: "Canada doesn't really have a broadband access problem," Goldberg said. "What we have is a broadband adoption problem."
There are already good high-speed options available for most people, regardless of where they live, he said. But some of those people remain unconnected because they can't afford or don't understand the technology.
"If people don't have a computer, they won't buy broadband access. For the kind of money being spent, (the CRTC) may have had better success getting more people connected if it had looked at the affordability for economically challenged households rather than looked at the very marginal benefit of adding a small number households to a wire line."
kgerein@thejournal.canwest.com
ref. - http://www.edmontonjournal.com/technolo ... story.html